Change is Coming: New Federal Law, Mortgage Payoffs & More

Dear Members,

Summer is here, along with kids out of school and afternoon storms.  Hope you have a great summer planned and have the chance to take a break or two to relax.  My plans include a road trip to Rochester, NY in early July.  I am joining a friend who is moving up there and needed company on the long drive.  I have never been to that area of the country and am looking forward to it (and some cooler weather!).

Lots going on to report.  Let's get started.

Corporate Transparency Act.  A new federal law going into effect Jan. 1, 2024 will have a significant impact on those who form, or have an interest in, a state-registered legal entity.  The Corporate Transparency Act requires providing information and copies of government issued identification documents to FinCEN under pain of civil or criminal penalty.  Take a look at this article in the June Fund Concept:  Tsunami Alert! BOI Reporting Begins January 1, 2024.  And join Bob Rohan (our Regulatory Compliance Counsel) for an informative webinar, Disclosing Beneficial Ownership: The Corporate Transparency Act,  on June 27th.   Here is a link to register

Legislative Spotlight.  This week's spotlight is on changes to how mortgage payoffs are handled.  Here are the highlights of SB 708 (Chapter 2023-135):

  • Effective October 1, 2023
  • Contains very specific procedures for the requesting of a payoff.  Also for the sending of the payoff by the lender to the requestor.
  • Conditional language in a payoff is prohibited.  The specific language of the statute is as follows:  the mortgagee may not "qualify, reserve the right to change, or condition or disclaim the reliance of others on the information….."  Any such language is "void and unenforceable."  I like it!
  • Allows a lender to correct a payoff if they do so within specific time parameters.
  • Funds sent to a lender in reliance on a payoff must be APPLIED TO PAY DOWN THE BALANCE.  If the lender wants to claim a shortfall, the discussion is then over the shortfall and not the full balance (interest accrues against only the shortfall).  Another "I like it!"
  • Lenders can pursue collection of any shortfall against their borrower.  Borrowers have the right to bring appropriate defenses to that action.  In the meantime, the lender must RELEASE THE LIEN and argue over the money.

Here is a link to the full text of the bill.

I think this is a significant improvement over the current situation that creates so many problems for sellers and closing agents.  I really hope it helps and will be very interested to hear what you think after it has been in effect for a few months.

ATTORNEY VALUE CAMPAIGN.  We have launched an Attorney Value Campaign and I invite you to become a part of it!  The initial phase of the campaign is focused on raising the awareness of real estate agents about the value you bring to a transaction.  We have content on social media , the internet , industry publications and billboards in targeted markets around the state.  How can you leverage this content?  By downloading and branding materials YOU can share with your referral partners……and those with whom you want to create a relationship!  Here is a link to those materials Send us your feedback on these materials; we are always willing to improve the tools we give you to succeed.

That's all for this week.

Let me know how we can help you.

Melissa Jay Murphy
Executive Vice President, Chief Legal Officer,
and General Counsel